February 2018

02/28/2018

Wills go through probate, while trusts do not. However, it really isn’t that simple. While it is true that ultimately wills and trusts can be used to do many of the same things, there is an important legal distinction between the two, according to the NWI Times in "Estate Planning: Why wills must be recorded."

A will is just a document with a set of instructions about how an estate's assets should be distributed and who should be in charge of that distribution. For the instructions to be followed, they must be given legal effect. The only way that can be done is by going to probate and having a judge approve them.

A trust is a separate legal entity when it is formed. Instead of an estate having assets, they are transferred to the trust. A trustee is named to oversee how those assets are handled.

The distinction might seem like a minor one, but it can be critically important in some circumstances.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances. They can also inform you on the differences between wills and trusts and how they might benefit you and your loved ones.

02/27/2018

Under the recently passed tax laws, exemptions are scheduled to sunset in 2026 and revert back to $5.5 million for individuals. That creates a potential problem for people with gifting programs who want to take advantage of the higher exemptions.

For example, if someone makes total lifetime gifts of $8 million before 2026, it is not clear what the IRS will do, according to Wealth Management in "Clawback Under the New Tax Law: Part 2."

Congress left it up to the IRS to determine through regulations whether the excessive gift amounts should be clawed back or allowed. It appears that Congress intended for the IRS to allow such gifts through a reading of the legislative history of the tax cuts. However, it is not known whether the IRS agrees with that assessment.

Whatever the IRS decides to do there will likely be court challenges to their actions. A definitive answer to what will happen is unlikely to come anytime soon. That means those who utilize the new law to give lifetime gifts in excess of $5.5 million, are taking on some risk in doing so.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, including the best way to carry out gifting.

02/26/2018

One of the major problems with estate plans is that non-attorneys frequently think it is a straightforward situation. However, unfortunately it usually isn’t, according to the South Bend Tribune in "You can do your own estate plan, but should you?"

Many people think they know just what they want done with their assets, after they have passed, so they do some research and may download a form or two to guide them. After a few hours, they have something that constitutes an estate plan and think they have saved money.

However, that process can easily backfire, as explained in a situation where a man thought he could make his own estate plan but it ended up a complicated mess after he passed away because no consideration was given for how his family would get liquid assets when they needed them. Since the estate is worth $12 million, it will cost far more in attorney's fees to sort out everything in the estate.

Some people suggest that instead of doing everything on your own, it would be a good idea to use an online service for estate planning. With those services, you can get some basic questions and answers to consider and they are cheaper than attorneys. The problem is that it still does not give you the personal attention estate planning requires.

In the end, lack of knowledge can be disastrous for your estate plan.

An estate planning attorney can answer your questions and advise you on creating an estate plan that meets your unique circumstances.

02/23/2018

The Baby Boomer generation in the U.S. will transfer $3.2 trillion to their heirs and most people have not made proper preparations, according to the Royal Bank of Canada Wealth Management, as reported by Private Wealth in "Americans Unprepared To Transfer Trillions, Report Says."

People who are not prepared to receive large sums of money do not normally deal with it well. This is especially true, if they are unprepared.

Collectively, that is exactly where the U.S. finds itself today.

Most Baby Boomers did not talk to their parents about their inheritances.

In turn, Baby Boomers have continued that tradition and are not communicating with their children about what they stand to inherit and how to manage it. Most do not even have wills, let alone any sort of comprehensive estate plan or wealth transfer plan.

While that might not seem like a big deal for any one family, it is a huge issue for the nation as a whole. Without proper preparation, there is a good chance that much of the $3.2 trillion could be wasted and lost.

An estate planning attorney can guide you in preparing an estate plan that fits your unique circumstances, including wealth transfer.

02/22/2018

It is unlikely that both members of a couple will pass away at the same time and the surviving spouse will be attempting to cope with the situation. This is not the time to be worrying about about finances, according to USA Today in "How to prepare financially for being a widow/widower."

They recommend some practical steps to take now, so you will be prepared to be a surviving spouse:

The most important step is taking the time to talk and make sure that both spouses are well-informed about the finances and how to handle them.

Run through scenarios so you will both know what will happen when either spouse passes away, taking into consideration what the surviving spouse's income and living expenses will be.

If you can afford to do so, then delaying Social Security benefits as long as possible will give a surviving spouse higher benefits.

Make sure that all beneficiary designations on retirement plans, bank accounts and insurance policies are correct.

It may be necessary to hire a financial planner who can help the surviving spouse.

Visit an estate planning attorney and make sure that your estate plan is up to date and adequately protects the surviving spouse.

It might be a good idea to move into a different home that will be more easily manageable for a surviving spouse.

02/21/2018

If you have a lot of money in your retirement accounts and are unlikely to spend it all in your lifetime, leftover funds will go to your beneficiary. What impact will that have upon your estate?

Any funds left over after the account holder passes away, could go to the designated beneficiary on the account. Because this can amount to a lot of money for the beneficiary, it is very important to plan for what that might mean the rest of your estate.

As with most things in estate planning, the answer for any person depends on individual circumstances. Generally, designating a trust as a beneficiary can allow the ultimate beneficiary to take the money out more slowly, protect the funds from creditors and pay a lower tax rate. However, for that to work, the trusts must be very carefully crafted, since any deviation from IRS rules can result in stiff penalties.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include a large retirement account.

Most estate planning attorneys do not expect to see very many changes in planning. Those who do, tend to think any changes will be small.

One reason is the number of people who will no longer have to pay the estate tax. Why? Because the number of Americans with estates exceeding the higher exemption is relatively small when compared to the general population.

A bigger reason is that many experts do not expect the changes to last very long and that politicians will reverse the changes.

An estate planning attorney can advise you on what would be your best course of action under the new estate laws.

02/19/2018

The state usually files a complaint on false claims in estate tax filing but a whistleblower in New York charges that her former boss lied by claiming he was a resident of Florida when he lived and worked in New York, according to the Wills, Trusts & Estates Prof Blog in "Suit is Filed in NY's First Unsealed Qui Tam Estate Tax Case."

The employee filed a suit under whistleblower laws known as a qui tam lawsuit.

If the lawsuit results in money for the State of New York, then the whistleblower will be entitled to a share of that money. This is believed to be the first such case in New York that has not been filed under seal.

These suits are obviously rare. It shows that if you are going to try to deceive the government about your residency for estate tax purposes, you might not get away with it if someone else knows about it.

An estate planning attorney can advise you on proper estate tax filing.

For many diseases, one of the important things scientists need to continue their research is something you might have and it is not money. Scientists might be able to use your brain after you pass away.

There are several common diseases that change the structure of a person's brain.

Researchers can use the organs from people who suffered from those diseases to help others who will suffer from them in the future. While some of those diseases, such as Alzheimer's and Parkinson's, are well-known by the general public to have neurological causes, the neurological causes of other diseases are not as commonly understood. For example, depression and post-traumatic stress disorder are often assumed by the general public to be psychological, but they are actually neurological and can change the structure of the brain.

02/15/2018

Wealthy people who delay getting estate plans have reasons that go beyond the common ones, according to a discussion by Barron's in "Don't Delay Planning Your Estate."

There are many reasons for delaying the creation of an estate plan, including the following: a decision to not think about death, the idea that a plan is probably complicated and if you don’t have many assets you don’t really need one.

On the other hand, wealthy people often put off estate planning because of indecision. They are not sure what to do and to whom they should leave different assets. They also often have doubts about how much wealth they should leave to their children and how much they should leave to charity.

This uncertainty causes them to delay going to an estate planning attorney. They believe what they should do will become clearer later.

The problem is that it really does not matter why someone delays getting an estate plan. Whatever the reason, not getting an estate plan is risky, especially for the wealthy.

No amount of wealth can guarantee that a person will not have an accident before he or she gets around to estate planning.

An estate planning attorney can help guide you in coming to decisions that best fit your unique circumstances.